At year-end 2001, the insurance funds under management by
the Federal Deposit Insurance Corporation totaled $41.4 billion. We earned
$2.7 billion in revenue including approximately $83 million in assessment
income from insured institutions. Ninety percent of insured institutions
paid nothing for deposit insurance last year.

Three banks and one thrift failed in 2001. Total assets for these failed
institutions totaled $2.2 billion; most of these were the assets of Superior
Bank, FSB. These four failures are estimated to cost the funds $445 million.

The Corporation's total budgeted spending in 2001 was $1.044 billion.
Eighty-six percent of this was spent on business line expensessupervision,
consumer protection, insurance, research, resolutions and receiverships.
We had 6,167 staff on board at year-end. The staff performed 2,566 safety
and soundness examinations and 2,180 compliance examinations.

In 2001, receivership asset sales and collections from assets in liquidation
totaled $256 million. The recovery from asset sales was $169 million,
for a recovery rate of 66 percent. In 2001, our receiverships paid $462
million in dividends, all but $16 million of which went to the insurance
funds. Asset sales and collections from the Superior conservatorship totaled
$507 million in 2001. Mortgage loan sales achieved a 98 percent recovery
rate and securities sales achieved a 102.7 percent recovery rate.

We were good, we were competent, and we did a fine jobjust as the
Corporation has done for every year since 1933. But times are changing.
Competence today is one thing. We must be ready to meet the challenges
of the future and we are not there yet. We will be, though. I have committed
my Chairmanship to achieving this goal.

I believe history will see 2001 as a setup year for the FDIC. We spent
a lot of time working on initiatives that will bear fruit in 2002 and
beyond. Id like to share a few of them.

We began a comprehensive review of the Corporation from top to bottom.
We scrutinized our organizational chart, our staffing levels, and our
cultureall with an eye toward becoming a more efficient, effective
and relevant organization.

We talked a lot about deposit insurance reform. It is our number one
external priority and we made our case to anyone who would listen.

We implemented a number of supervision process reforms. These were designed
to focus our resources on risks in the banking system and set the stage
for more ambitious reforms next year.

We designed and vetted a compliance examination structure that will serve
as the management model for a more focused and customer-friendly supervision
and consumer affairs division.

We developed a great financial education toolMoney Smartthat
will help the least fortunate among us to learn about managing their finances.

We worked on improving our technology platformsas prelude to modernizing,
with our fellow regulators, the way we collect, manage, store and publish
institution data.

We did a better job using the Internetadding a feature to our Web
page that allows users to search for unclaimed funds from failed financial
institutions and transmitting the Preliminary Bank Earnings Report via
satellite Webcast. Many of our asset sales were conducted online.

And in the sad wake of September 11, we began efforts to review and update
our business continuity and disaster recovery procedures.

This is no small list of chores. We worked hard on all these priorities.
We must continue these efforts and more if we are to become a vital and
relevant voice in the banking sector.

Now we have to build on this agendaand, indeed, we must pursue
a more ambitious oneif we are to make the Corporation an effective
and efficient agent of change. Here are some things we have to do:

We must continue our efforts to convince the Congress and the banking
industry that deposit insurance reform is workable, necessary and in the
national interest.

We must succeed with our leadership and management initiatives at the
FDIC to ensure we are well positioned to be a relevant and innovative
voice on the issues that matter to banks, the Congress, the policymaking
community and the depositors of America.

We must succeed to show that government agencies can change, that they
can become more efficient, and that they can do more with less.

We must work to ensure our supervision processes are rational, efficient,
effective, and clearly communicated. We should do our job well and impose
as little burden as possible on the institutions we supervise.

We must ensure our supervision structure going forward breaks down the
old cultural barriers between safety and soundness and compliance and
that the combined division is both effective and responsive to the needs
of the industry and the demands of the economy.

We must expand our financial education initiative beyond Money Smart
and commit ourselves to the goal of forming partnerships in all 50 states
to ensure more of low- and moderate-income Americans learn from our curriculum
and join the financial mainstream.

We must strengthen our technology infrastructurefrom security to
customer serviceto ensure we pass every test we take in the coming
year. And we must press on with our data innovationsboth at home
and in the interagency process.

We must continue our efforts to provide FDIC information and analysis
to the publicreleasing it as it becomes available, and when it is
most relevant.

And, sadly, we must demonstrate our capabilities to move our business
operations and carry on at a moments notice should disaster strike
again.

This is my to-do list for the year. But Im not terribly
worried because I am not alone. Everywhere I go, I tell people that the
FDIC is full of wonderful people who work hard, love their families and
love their country. That is the truth. I have asked our staff to rise to
the challenge, as they did during the banking crisis a decade ago, and help
us accomplish these goals. I know they can make us a better and more effective
organization.

There will be naysayers. There always are. Some will question our direction.
Some will question this or that initiative. And some will question my
leadership. I cannot do anything about these folks.

What I can do is get up every morning, come to the FDIC, and work hard
trying to make this wonderful institution even better than it has ever
been.

That is my job. Every day, as I meet our employees, I am learning just
what an honor it is to work here.

These are our goals. Every day, as we make incremental progress, I am
finding we have both the resources and the will to accomplish them.

And this is our challenge. Every day, I hope the employees of the FDIC
and every one of our stakeholdersthe industry, the Congress, the
American peoplewill scrutinize us and provide guidance so we can
lead the packand then some.